Workers working at a road construction site in Kolkata, West Bengal, India. (Photographer: Prashanth Vishwanathan/Bloomberg)

Budget 2017: The Need To Skill Workers At India’s Construction Sites

The construction sector has the potential to add 50 million jobs over the next 10 years, according to a report by the McKinsey Global Institute. The government’s infrastructure projects, including the ambitious ones like the Sagarmala for new ports and 100 Smart Cities, could contribute a big chunk to it.

The 124-kilometre Mumbai metro project is alone expected to generate 50,000 jobs.

“The biggest increase in non-agricultural employment has been in the construction sector, where the share of employment in rural areas has risen from 14.4 percent (1999-00) to 30.1 percent (2011-12),” says a report by the International Labour Organization on the Indian Labour Market-2016.

Satish Parakh, managing director of construction firm Ashoka Buildcon Ltd., is optimistic given the projects the company has in its kitty.

“I can say with every project worth Rs 500 crore, we generate around 1,000 jobs. This figure includes direct and indirect employment,” says Parakh.

Also Read: Budget 2017: What Next For Farm Workers As Mechanisation Kills Jobs?

Shortage Of Skilled Labour

While no one questions the scope and scale of new jobs that can be created by the construction sector, finding workers with the right skills remains a concern.

The National Skill Development Corporation’s (NSDC) report on Human Resource and Skill Requirement, published in 2013-14, shows the workforce in the construction and real estate sector will touch approximately 76 million by 2022. Of these, 97 percent of workers between the age of 15 and 65 are likely to have no training before they start working, according to National Sample Survey Office’s findings.

Niranjan Hiranandani, head of one of the biggest real estate developers in Mumbai, says lack of skills means workers get paid lesser. The fact that the construction sector will need to add 10 to 12 percent to the workforce every year for the next five years makes the situation even more difficult, he says.

Skills the sector needs are growing hugely, but it’s difficult to get such workers. Training them is of utmost importance as it will help improve their income levels
Niranjan Hiranandani, Co-Founder & CMD, Hiranandani Group

Hindustan Construction Company Ltd., among the bigger construction players in the country, needs about 35-40 percent of its labour force to be skilled for using heavy and complex machinery that’s been making inroads into the sector.

With skilled workers not available, the only option is to train them, said a company spokesperson.

Rahul Sapkal, a guest lecturer on urban migration at the Tata Institute of Social Sciences (TISS), says there is a massive scope for employment in the sector. “The sector that attracts FDI will have the most number of contract workers,” said Sapkal.

Also Read: Budget 2017: The Challenge Of Skilling India

Skilled Versus Unskilled Divide

There is no shortage of workers seeking employment at construction sites, often at very low wages.

Sapkal says the wage gap between skilled and unskilled workers is huge. The differential is as much as 73 percent between an unskilled and a semi-skilled worker, and widens with specialisation, as is the case in other sectors.

“Depending on the skill set, the difference between the wages is 20 percent at the lower end, going up to 70 percent at the higher end,” says Anindya Mallick, partner at Deloitte India.

The salary ranges between Rs 200 and Rs 1,000 per day depending on skills a worker has, says the HCC spokesperson quoted above.

Training Process

Construction companies like Ashoka Buildcon and Hiranandani Group have no option but to train migrant workers.

Parakh says the company’s Ashoka Training Institute, which has been operating for 15 years, has skilled over 5,000 people.

Hiranandani Group, which operates a similar institute, trained about 700 workers last year. “The target this financial year is to skill about 2,000 workers,” says Hiranandani .

The cost of training, according to Sapkal, works out to Rs 1,200 per worker, which companies include in their corporate social responsibility. But there’s a catch. Training given to workers is not standardised, with every company focusing on different skills.

Also Read: India On A ‘Jobless Growth’ Path

Automation Making Inroads

Technology and automation are eventually expected to reduce the number of workers required at construction projects.

Sapkal believes 10 years from now, automation will have the power to replace semi-skilled and unskilled workers, who make up bulk of the workforce in the construction sector. This, he says, will push down wages of skilled workers as well.

BloombergQuint
Stay Updated With Union Budget India News On BloombergQuint